Sure, this is true for individual vehicles for now. I was referring more on Rapid transit (that use electricity) as a means for transportation. Anyway Iâd like to keep this topic related to the oil price if possible. My mistake that I started with some coulda shoulda woulda ideas⦠There are plenty of topics that talks about this kind of stuff. Cheers.
Europe does not serve as a comparable because the distance traveled...for everything is less...thus it is money usage per task that should be compared... Alt energy sources get smacked every time...by oil prices coming into comparable favor in short time frames... Obviously alts will not kick in because tax related matters are not trust worthy...Billions of planned money can vaporize at the stroke of a pen...just like the tax reform act of 1986... What has to happen for alts is that oil is not available as a trustworthy alternative... The other catch 22 with alts is that when price favoritism occurs...they will want the whole difference ... Look...eliminate oil in the US...whoever uses it ...will serve life in prison...or death... Then you will have alts working so fast...and how...lol...
An interesting mini nuke project in the little, isolated town of Galena (pop 700), Alaska is worth following. As I understand it, Galena has very high electric costs as it uses diesel generators supplied during the ice free months on the Yukon river. Toshiba has a mini nuke that seems to fit Galena's needs. The little nuke's core (the nuclear reactor) is about 2feet by 6 feet and will be installed below ground under concrete. The fuel should last 30 years before it needs to be refueled/discarded. One hangup, among many, is the NRC regs will require about 34 guards. The project sponsors say 4 guards plus local security should be sufficient. And of course, the 5 year approval time with a $200 / hour charge for the bureaucrats time is also a major hurdle although Toshiba may be willing to pay up to demonstrate the usefullness of the reactor. More: http://www.atomicinsights.com/AI_03-20-05.html DS
I'm very glad it's not politically acceptable here, because it's not economically acceptable. A tax on oil is just another "sensible reason" to increase overall taxation, which always has a cost on economic growth. The market anticipates future changes in supply/demand and adjusts prices accordingly. It will not wait until oil is exhausted before the prices encourage funding of alternative energy sources. It anticipates much better than any individual, commitee or government. If you don't believe that, compare the economic performance of free market economies to more restrictive market economies to totalitarian economies.
I already posted on this item but the moderator was so "kind" to remove my posting. I will post a part again in a very very polite version: The US and the EU have about the same population, the same standard of living and the same kind of economics. But The US consumes DOUBLE of what the EU consumes in oil. In fact the US consumes more than 25% of the total energy consumption of the entire world.
You can throw Japan into the mix too, but is it fair? The US is about 2.5 times the size of EU, and about 30 times the size of Japan. With the larger size, it's more expensive to move materials around. I don't know if this fully accounts for the difference in energy consumption, but it may be a significant chunk of it. The EU cities are compactly built because of its long history. The US does not have the benefit of that. So should the government or any other organization force Americans to live in tight quarters because it's more energy efficient? Perhaps the US just has the unfortunate distinction of being a highly developed economy that's also big, so that it ends up being the glutton of the world? China is growing stronger economically, perhaps one day it'll become the glutton that everyone points to? If the EU reduces energy taxation, its consumption will go up too, as will its economic growth. What's wrong with the idea of everyone openly competing for scarce resources? It will drive up the price for sure, and encourage R&D on alternatives. All through history, there're people predicting doom and gloom due to resources running out, every time the problems were overcome by human ingenuity. I see no reason to expect any different in the future. Running out of food? Find better production methods. Running out of oil? Go nuclear and make hydrogen. Running out of land? Explore space.
The key here is that the rules are not uniform... The world economies are not in equlibrium...particularly with regards to labor... Equilibrium means foreign labor = domestic labor...which means domestic labor will work for less...foreign labor will work for more... Energy per unit of consumption with regards to movement of goods is naturally unequal...This is why Europe can tax more...as well as Japan...and have per unit consumption be comparable... The real problem with oil is that the highest economies are at liberty to take oil down to $20 and still do well...This is how many marginal wells were shut down in 82... Thus the low cost producers must never drop their prices below a point whereby alts can be competitive...which is not in their favor...this is the problem... Thus the solution for nonproducing states is to form a moving tax that protects alts...when the alts take hold...guess what...the alts have a chance to be cheaper than the low cost oil countries...
Hi spike, During many years I reflected about this situation. I believe that ever since after WWII, the Europeans put themselves in a very unfavorable position by having allowed their politicians to make of oil an easy cash cow by slapping ridiculous excess taxation on it. In this way of course, call it socialism if you like, Europeans have always put themselves at a crippling artificial disadvantage compared to their American counterparts. Slick European politicians skilled at making their victimized countrymen believe anything, often play on the 'unfairness' situation you repeated in your above post. This is a merely self-inflicted pain. In fact this love of masochism-exploitation has caused Europeans lots of self damage in other fields: VAT, import duties, income tax, you name it. Appealing to instincts of jealousy by citing unfairness is always an easy trick of demagogues. In order to justify the comfort of that huge easy money stream politicians created for themselves, they also repeatedly claim that Europeans enjoy much better 'social security' protection. Haha! Ever read about pension and health insurance projections in Europe? At least, in the US they are still attempting to do something about this. In the EU, it's poorhouse guaranteed! Don't forget that since WWII, they even stopped paying for a decent military in defense of their own citizenry. Everything is geared towards a quick escape towards the safety of the US for the privileged politico class. Of course, it is difficult to ascertain where Europe would have been relatively if market forces had been allowed to play their natural way, this over a period of tens of years. For sure, the balance would have looked much different today.
That's not actually true. The free market does a lot of things very well, but attaching the correct economic value a shared and limited resource is not one of them. This is known somewhat melodramatically as the "tragedy of the commons." Such shared resources include the air we breathe, the oil reserves we are depleting, and the body of theoretical knowledge that we gain through basic research. I don't really want to get into another long off topic discussion in another thread, but I have to say, the anti-gas-tax arguments here have been pretty laughable. There are good reasons not to have a punitive gas tax but I haven't seen any of them yet. Martin
The free market can only do a good job at managing resources under its domain. Saying the free market did a horrible job at managing air pollution is like saying Warren Buffet is a bad investment manager because he didn't make me rich. He didn't make me rich because my money is not under his management. Now if you can somehow attach monetary value to a shared resource and trade it on a free market, that's when you can tell if the free market is good at managing that resource. This has been attempted before. Read up on how they solved the acid rain problem in NE US. Read up on the Kyoto protocol. Time will tell whether this idea can really succeed. A punitive tax is just an attempt for the government to artificially attach a monetary cost to a shared resource. Unfornately they can't do a good job at pricing it. If you think otherwise, please give an example of where a government has priced something better than a free market over an extended period of time. I can give you plenty of examples where government-controled pricing of resources/products led to gluts, shortages, and economic ruin.